Gasoline Prices Are Not Rising, the Dollar Is Falling

#2
#2
Where Newt got the inspiration for his $2.50/gallon campaign:

crack-pipe.jpg
 
#4
#4
Seriously though, I half expected a gold standard diatribe. We don't need to go back to the gold standard, we just need to stop the time honored tradition of dollar flooding.

The dollar doesn't seem to be trading all that poorly ATM though; for a significant portion of 2008, a Euro would get you just under $1.60, even with the recent spike, the price is still $1.30-something. Opposite trend is occurring with the Yen, but we're not at any lower of a point than any time in the last year.

One thing the article you posted missed on altogether, is that gas prices are no longer set by WTI; it is set by Brent crude, which trades at -- you guessed it! -- north of $124/barrel. I still think sanctions against Iran, tension around the Straight of Hormuz and the possible stabilization of the Eurozone, and potential supply risks are the better explanations.

Otherwise, good points made, this may result in poor policy being enacted this summer, but I doubt we're going to see stagflation round 2. I think that article is a bit too doom and gloom.
 
#5
#5
Pretty flawed report.

Inflation is contributing to the problem but it's not the problem.

The main issue is a rising global demand.

Given the author's theory the core CPI index should be increasing at the same rate as oil prices.... it's not.

Given his theory, why isn't the housing market rising at the same pace?
 
#6
#6
milohimself said:
...
Otherwise, good points made, this may result in poor policy being enacted this summer, but I doubt we're going to see stagflation round 2. I think that article is a bit too doom and gloom.
Click to expand...

A good case could be made that stagflation round one hasn't ended.

1) Unemployment numbers don't reflect discouraged workers no longer receiving benefits or whose benefits have run out. What do you think our true unemployment rate is right now?

2) Inflation is being measured by a "core CPI" ignoring energy and food costs. That's a great measure if you want to stay at home in the dark and not eat.
What is the true inflation rate?

Combined true result suggest continued stagflation.
 
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#7
#7
With you that the unemployment rate we use is a poor indicator of the actual situation. Same goes for a number of economic indicators
 
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